“What does Heath’s bonding capacity mean for you? More than you imagine!”
August 8, 2011
For most people, the big surprise in any discussion about surety bonding is that the subject involves so much more than just bid bonds, performance and payment bonds, and even overall bonding capacity. As Heath Construction’s bonding agent and an expert with 30 years of experience, I could assure you that Heath has enough bonding capacity to support all of the projects it chooses to pursue. But would you fully understand why that is so important – to you?
If you are like most project owners, architects and construction managers, the answer is No.
Let’s clear up 4,700 years of confusion.
The problem is the confusion that still surrounds surety bonding – even though surety has been an accepted tool for managing risk since at least 2750 BC. (That’s no joke! Click here and read about the long history of surety – from Mesopotamia to the USA.) Many contractors think of bonding as just one more bureaucratic hurdle to overcome in order to qualify for work on desirable projects. Many owners think that bonding is basically an insurance policy...and that one surety bond is as good as another because they all provide the same financial safety net…
They all miss the point – and the essential benefit of surety bonding.
Surety is not like insurance, because it is not designed simply to pay off when an unpredictable, adverse event occurs. The whole surety process is designed to prevent loss.
Let me show you how.
Step 1: Pre-qualification under a microscope.
Long before bonds are issued, the contractor must be pre-qualified. His company is analyzed from head to toe by financial and construction experts outside the company. The examination includes financial strength and stability, reputation, construction performance going back years, relationships with owners and subcontractors, equipment, training programs, safety programs…the works.
Contractors like Heath don’t fear this process. They embrace it! They welcome expert criticism and suggestions for improvement. They seize the opportunity to strengthen their operation, make their jobsites safer for employees and subcontractors, become more competitive, and deliver more value to owners.
Step 2: The contractor builds a long-term relationship with a surety company.
As the years go by, the “surety” (that’s what we call the company that issues surety bonds) becomes more and more familiar with the contractor’s true capabilities and management strength. This is why the value of the bond is really much greater than its role as a financial safety net. The bond is your assurance that the project will be completed according to the terms of your contract and your expectations.
Heath’s continuous 15-year relationship with Flood & Peterson and EMC Insurance Companies, an A-rated surety and one of the leading sureties in the U.S., is evidence of Heath’s financial and management strength, and its record of success. In fact, during all these years, EMC has never declined to support a surety bond for Heath, and EMC has never received a complaint or claim from an owner.
Step 3: The improvement process never ends.
The contractor also maintains a continuous program of improvement with an expert in construction risk management. This is one of our specialties at Flood & Peterson. We work with Heath and other top construction companies in the region all year long to make these great companies even better – with more reliable performance and greater safety on every jobsite.
No one knows Heath better than we do at Flood & Peterson.
Our relationship has spanned the highs and lows of economic cycles, and so has the success of Heath Construction. This is the result of our close collaboration, our ongoing improvement programs that have strengthened the company, and the high standards Heath applies to its employees and subcontractors.
Speaking with confidence based on all these years of experience and superb performance, I am glad to recommend Heath to you for virtually any type of construction project, on any scale.
Thank you. Please feel free to contact me with any questions you may have.
VP & Director of Surety
Flood & Peterson Ins.
> Blog Index